Autodesk (ADSK) risk factors, FY2025 10-K

Risks Relating to Our Business and Strategy

1. 01Our strategy to develop and introduce new products and services exposes us to risks such as limited customer acceptance (both with new and existing customers), costs related to product defects, and large expenditures, each of which may result in no additional net revenue or decreased net revenue
2. 02Global economic and political conditions may further impact our industries, business, and financial results
3. 03Our business could be adversely impacted by the costs and challenges associated with strategic acquisitions and investments
4. 04We are dependent on international revenue and operations, exposing us to significant international regulatory, economic, intellectual property, collections, currency exchange rate, taxation, political, and other risks, which could adversely impact our financial results
5. 05Some of our business partners also have international operations and are subject to the risks described above
6. 06We may not be able to predict subscription renewal rates and their impact on our future revenue and operating results
7. 07Existing and increased competition and rapidly evolving technological changes may reduce our revenue and profits
8. 08Our financial results, key metrics, and other operating metrics fluctuate within each quarter and from quarter to quarter, making our future revenue and financial results difficult to predict
9. 09We derive a substantial portion of our net revenue from a small number of solutions, including our AutoCAD-based software products and collections, and if these offerings are not successful, our revenue would be adversely affected
10. 10From time to time we realign or introduce new business and sales initiatives; if we fail to successfully execute and manage these initiatives, our results of operations could be negatively impacted
11. 11We may not successfully execute or achieve the expected benefits of our restructuring plan and other measures we may take in the future, and our efforts may adversely affect our business
12. 12Net revenue, billings, earnings, cash flow, or subscriptions shortfalls or volatility of the market generally may cause the market price of our stock to decline
13. 13As a result of our strategy of partnering with other companies for product development, our product delivery schedules could be adversely affected if we experience difficulties with our product development partners
14. 14We incorporate AI into our offerings, and challenges with properly managing its use could result in competitive harm, reputational harm, or liability, and adversely affect our results of operations
15. 15As previously disclosed on April 1, 2024, the Audit Committee commenced an internal investigation with the assistance of outside counsel and advisors, regarding Autodesk’s free cash flow and non-GAAP operating margin practices. The results of that investigation were announced on May 31, 2024

Risks Relating to Our Operations

1. 16Security breaches or incidents may compromise the integrity of our or our customers’ systems, solutions, offerings, services, applications, data, or intellectual property, harm our reputation, damage our competitiveness, create additional liability, and adversely impact our financial results
2. 17Our use of third-party open source software could negatively affect our ability to sell subscriptions to access our products and subject us to possible litigation and greater security risks
3. 18We rely on third parties to provide us with a number of operational and technical services; third-party security incidents could result in the loss of our or our customers’ data, expose us to liability, harm our reputation, damage our competitiveness, and adversely impact our financial results
4. 19Delays in service from third-party service providers could expose us to liability, harm our reputation, damage our competitiveness, and adversely impact our financial results
5. 20We are investing in resources to update and improve our information technology systems to digitize Autodesk and support our customers. Should our investments not succeed, or if delays or other issues with new or existing information technology systems disrupt our operations, our business could be harmed
6. 21Our software solutions are highly complex and may contain undetected errors, defects, or vulnerabilities, and are subject to service disruptions, degradations, outages or other performance problems, each of which could harm our business and financial performance
7. 22If we do not maintain good relationships with the members of our distribution channel, or if our distribution channel suffers financial losses, becomes financially unstable or insolvent, or is not provided the right mix of incentives to sell our subscriptions, our ability to generate revenue will be adversely affected
8. 23We rely on software from third parties, and a failure to properly manage our use of third-party software could result in increased costs or loss of revenue
9. 24Our business could be adversely affected if we are unable to attract and retain key personnel
10. 25We rely on third-party technologies and if we are unable to use or integrate these technologies, our solutions and service development may be delayed and our financial results negatively impacted
11. 26Disruptions in licensing relationships and with third-party developers could adversely impact our business

Risks Relating to Laws and Regulations

1. 27Increasing regulatory focus on privacy, data protection, and information security issues and new and expanding laws may impact our business and expose us to increased liability
2. 28and depending on the impacts of these rulings and other developments with respect to cross-border data transfer, we could suffer additional costs, complaints and/or regulatory investigations or fines, have to stop using certain tools and vendors, and make other operational changes
3. 29We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls
4. 30If we are not able to adequately protect our proprietary rights, our business could be harmed
5. 31We may face intellectual property infringement claims that could be costly to defend and result in the loss of significant rights
6. 32Contracting with government entities exposes us to additional risks inherent in the government procurement process

Risks Relating to Financial Developments

1. 33We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows
2. 34Our debt service obligations may adversely affect our financial condition and cash flows from operations
3. 35Changes in tax rules and regulations, and uncertainties in interpretation and application, could materially affect our tax obligations and effective tax rate
4. 36If we were required to record an impairment charge related to the value of our long-lived assets or an additional valuation allowance against our deferred tax assets, our results of operations would be adversely affected
5. 37Our business may be significantly disrupted upon the occurrence of a catastrophic event
6. 38Changes in existing financial accounting standards or practices, or taxation rules or practices may adversely affect our results of operations
7. 39We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price
8. 40In preparing our financial statements we make certain assumptions, judgments, and estimates that affect amounts reported in our consolidated financial statements which, if not accurate, may significantly impact our financial results